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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
STIR
RBNZ dated OIS pricing collapses 20-32bp across meetings as U.S STIR pricing shunts lower in the wake of the Silicon Valley Bank (SVB) collapse.
- April meeting pricing softens to 16bp of tightening after being as high as 45bp last week. For reference, RBA-dated OIS has, at least temporarily, called an end to the tightening cycle with 25bp easing priced by end-22.
- Terminal OCR expectations continue to tumble with pricing at 5.13%, well above RBNZ’s projected OCR peak of 5.50% and last week’s high of 5.64%. Up until last week, Terminal OCR expectations had traded in a 5.15-5.55% range since the RBNZ lifted its projected terminal OCR to 5.50% in the November MPS.
- With the recent decline in terminal rate expectations more tied to global factors, this week’s Q4 GDP release offers a chance for the local market to refocus, at least temporarily, on domestic drivers.
- After remaining surprisingly resilient in the face of aggressive tightening, recent data has become patchier with December quarterly declines for retail sales, manufacturing, and construction. BBG consensus currently expects -0.2% Q/Q for Q4 GDP versus the +0.7% expected by the RBNZ in its February MPS.
Figure 1: OCR & Terminal Rate (RBNZ Projections Peak & OIS Expectations)
Source: MNI - Market News / Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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